Class 12 Micro Economics - Chapter Market Equilibrium NCERT Solutions | Can you think of any commodity on which
Can you think of any commodity on which the price ceiling is imposed in India? What may be the consequence of price-ceiling?
In India, there are many goods on which government has imposed price ceiling, in order to keep them available within the reach of the BPL (below poverty lime) people. These goods are kerosene, sugar, wheat, rice, etc. The following are the consequences of price ceiling:
1) Excess demand - Due to artificially imposed price, cutting lower than the equilibrium price leads to the emergence of the problem of excess demand.
2) Fixed Quota - Each consumer gets a fixed quantity of good (as per the quota). The quantity often falls short of meeting the individuals requirements. This further leads to the problem of shortage and the consumer remains unsatisfied.
3) Inferior goods - Often it has been found that the goods that are rationed are usually inferior goods and are adulterated.
4) Black marketing - The needs of a consumer remain unfulfilled as per the quota laid by the government. Consequently, some of the unsatisfied consumers get ready to pay higher price for the additional quantity. This leads to black-marketing and artificial shortage in the market.
More Questions From Class 12 Micro Economics - Chapter Market Equilibrium
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How will a change in the price of coffee affect the equilibrium price of tea? Explain the effect on equilibrium quantity also through a diagram.
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When do we say that there is an excess demand for a commodity in the market?
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Suppose the price at which the equilibrium is attained in exercise 5 is above the minimum average cost of the firms constituting the market. Now if we allow for free entry and exit of firms, how will the market price adjust to it?
- Q:-
Suppose the market determined rent for apartments is too high for common people to afford. If the government comes forward to help those seeking apartments on rent by imposing control on rent, what impact will it have on the market for apartments?
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When do we say that there is an excess supply for a commodity in the market?
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Explain through a diagram the effect of a rightward shift of both the demand and supply curves on equilibrium price and quantity.
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How are equilibrium price and quantity affected when income of the consumers
a) Increase
b) Decrease
- Q:-
Explain market equilibrium.
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Explain how price is determined in a perfectly competitive market with a fixed number of firms.
- Q:-
In what respect do the supply and demand curves in the labor market differ from those in the goods market?
Popular Questions of Class 12 Micro Economics
- Q:-
Explain the concept of a production function
- Q:-
What would be the shape of the demand curve so that the total revenue curve is?
(a) A positively sloped straight line passing through the origin?
(b) A horizontal line?
- Q:-
Discuss the central problems of an economy.
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What are the characteristics of a perfectly competitive market?
- Q:-
What do you mean by the budget set of a consumer?
- Q:-
What is the total product of input?
- Q:-
From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:
Quantity
1
2
3
4
5
6
7
8
9
Marginal
Revenue
10
6
2
2
2
0
0
0
-
- Q:-
What do you mean by the production possibilities of an economy?
- Q:-
How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
- Q:-
What is budget line?
Recently Viewed Questions of Class 12 Micro Economics
- Q:-
The following table gives the marginal product schedule of labour. It is also given that the total product of labour is zero at zero level of employment. Calculate the total and average product schedules of labour.
- Q:-
Let the production function of a firm be Q=5L1/2K1/2Q=5L1/2K1/2 Find out the maximum possible output that the firm can produce with 100 units of LL and 100 units of KK.
- Q:-
Consider the demand for a good. At price Rs 4, the demand for the good is 25 units. Suppose the price of the good increases to Rs 5, and as a result, the demand for the good falls to 20 units. Calculate the price elasticity.
- Q:-
What is budget line?
- Q:-
Will a profit-maximising firm in a competitive market produce a positive level of output in the short run if the market price is less than the minimum of AVC? Give an explanation.
- Q:-
Distinguish between a centrally planned economy and a market economy.
- Q:-
When does a production function satisfy increasing returns to scale?
- Q:-
A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increases to Rs 15 and the firm now earns a revenue of Rs 150. What is the price elasticity of the firm’s supply curve?
- Q:-
Suppose there was a 4 % decrease in the price of a good, and as a result, the expenditure on the good increased by 2 %. What can you say about the elasticity of demand?
- Q:-
Consider a market where there are just two consumers and suppose their demands for the good are given as follows:
Calculate the market demand for the good.
p
d1
d2
1
9
24
2
8
20
3
7
18
4
6
16
5
5
14
6
4
12
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